By Richard Cowan

WASHINGTON (Reuters) - The second-ranking Republican in the U.S. Senate said on Monday there must be "significant changes" in Iraq well before the end of the year, signalling President George W. Bush could face new challenges on war policy from members of his own party.

Senator Trent Lott of Mississippi, who holds the No. 2 leadership position in his party, made his comments a day after similar remarks by another powerful Republican lawmaker, House Leader John Boehner of Ohio.

"I do think this fall we've got to see some significant changes in the situation on the ground, in Baghdad and other surrounding areas ... or else," Lott told reporters.

Lott would not elaborate on possible consequences.

Boehner also discussed the need for progress in an appearance on the "Fox News Sunday" television program.

"By the time we get to September, October, (Republican) members are going to want to know how well this is working and if it isn't, what's Plan B," he said.

"Yes, generally I agree with him," Lott said of Boehner on Monday.

Gen. David Petraeus, the U.S. commander in Iraq, is expected to deliver a progress report in September.